Author Topic: Picking my 401(k) investment  (Read 2096 times)

King Stilts

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Picking my 401(k) investment
« on: June 14, 2016, 07:45:24 PM »
Hello friends and fellow mustachians, I've been a lurker on this board for quite some time now but really am into the position to make a long-term commitment to a 401(k) fund provided by my employer that I plan to keep funding until my eventual (and hopefully reasonable) retirement.

The main things I have learned from this board is that high fees are my mortal enemy, so I will be deliberately excluding the high fees that come along with the T. Rowe Price Target Date Funds that have fees over 1%.  In fact, I'll be leaving out any funds that have fees over .50% because there are good investments that I can pick and choose instead.

I am really leaning towards dumping almost everything (about 10% of my paycheck) into the Vanguard Small Cap Index and opening up a separate Roth IRA where I can diversify myself further into international stocks, a large cap fund, and perhaps a bit into bonds.  My company matches up to 10% of my investment no matter how much I invest, which I believe is great! (right???)  But I do not feel properly diversified holding only small cap US stocks.  Any help is greatly appreciated!!!  Thanks for welcoming me into the community!

I am looking at:

----Core Funds----

DFA Large Cap Value  -  0.27%

Company Stock Fund -  0.17%

Fifth Third Equity Index Collective  -  0.05%

Dodge & Cox Income Fund - Bond -  0.44%

Vanguard Small Cap Index Inst - Small Cap  -  0.08%  (good returns given fees)

Vanguard Prime Money Market Fund -  Money Market - 0.10% (hasn't shown great returns)


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Re: Picking my 401(k) investment
« Reply #1 on: June 14, 2016, 08:40:10 PM »
The Fifth Third Equity Index Collective sounds like an Index fund (probably tracking the S&P 500). At 0.05% ER, I'd consider it.



  • Bristles
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Re: Picking my 401(k) investment
« Reply #2 on: June 14, 2016, 10:28:48 PM »
The Fifth Third is an S&P 500 fund. The Vanguard Small Cap is self explanatory. Both are excellent, low-cost options. Be thankful you have great options, and yes, the match is excellent!

Decide on an overall asset allocation, perhaps creating an IPS, and invest accordingly.

If the 401(k) will be the bulk of the portfolio, I would recommend the S&P500 fund. Small caps are not a bad option either, but you can expect more volatility and uncertainty from the asset class, possibly an upside in long-term return, but that's far from a given.


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Re: Picking my 401(k) investment
« Reply #3 on: June 15, 2016, 05:59:21 AM »
I have my US equities split between the Vanguard SP500 fund and the S&P Completion fund, which is pretty similar to what you'd get with the 5/3 plus Vanguard small cap fund (missing some midcap exposure).

King Stilts

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Re: Picking my 401(k) investment
« Reply #4 on: June 15, 2016, 03:07:49 PM »
So if I am understanding you guys correctly, my best options are investing the majority (say 8/10) into the Fifth Third fund, the remaining 2/10 into the Small Cap, and perhaps buy some Vanguard Mid-cap (perhaps VIMSX or VO ETF) while eventually entering into international stocks and the bond market once I save some more money since I just started.  I really want to get into saving at least 15% of my paycheck or up to 30% as my rent for my apartment is still dirt cheap.

Oh and thanks for the link, PhysicianOnFIRE, that was a very good read.  Everyone else same thing, I really appreciate it and anyone else please chime in!!!


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